PUC won’t address electric reliability until fall

In a classic case of closing the barn door after the horses have all run away, the Public Utility Commission probably won’t address the state’s pressing electricity reliability issues until the fall, chair Donna Nelson told a panel at the CERAWeek energy conference this morning.

Nelson favors a capacity market, which would essentially pay generators to maintain a reserve capacity that could be used in an emergency. Anderson, meanwhile, has questioned whether the shortage is as severe as the reports indicate.

Texas faces potential blackouts this summer because its generating reserves have fallen below a level deemed adequate to meet demand. So far, the PUC and the state’s grid operator, the Electric Reliability Council of Texas, have been unable to find a solution. A preliminary report released last week found that ERCOT may have to declare an emergency this summer and implement rolling outages because the reserve cushion is thinner than expected.

Commissioners voted last year to raise limits on wholesale prices, but that failed to encourage generators to build new power plants. Now, it’s too late for new plants to save us.

The best short-term response would be to work with commercial customers in managing demand. The PUC has such as program, but it doesn’t attract many participants because of the way it’s structured.

Today’s panel included representatives of a half dozen market participants, from generating companies to consumers, yet few agreed on the best way to address the problem.

The PUC has provided no leadership on the issue, and by the time it gets around to addressing it the fall, commissioners may be taking a vote by candlelight.